Frazer v. Frazzano ( 2015 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
FRAZER, RYAN, GOLDBERG & ARNOLD, LLP, Applicant/Appellee,
v.
PATRICIA FRAZZANO, Respondent/Appellant.
No. 1 CA-CV 14-0181
FILED 6-9-2015
Appeal from the Superior Court in Maricopa County
No. CV2013-015470
The Honorable Arthur T. Anderson, Judge
AFFIRMED
COUNSEL
Schneider & Onofry, P.C., Phoenix
By Charles D. Onofry, Luane Rosen
Counsel for Respondent/Appellant
Frazer, Ryan, Goldberg & Arnold, L.L.P., Phoenix
By John R. Fitzpatrick, Joshua D. Moya
Counsel for Applicant/Appellee
FRAZER et al. v. FRAZZANO
Decision of the Court
MEMORANDUM DECISION
Judge Samuel A. Thumma delivered the decision of the Court, in which
Presiding Judge Lawrence F. Winthrop and Judge Donn Kessler joined.
T H U M M A, Judge:
¶1 Patricia Frazzano appeals from the superior court’s judgment
confirming an arbitration award in favor of Frazer, Ryan, Goldberg &
Arnold, LLP (Frazer Ryan). Because Frazzano has not shown the superior
court erred, the judgment is affirmed.
FACTS1 AND PROCEDURAL HISTORY
¶2 In 2010, Frazzano’s transactional attorney contacted Frazer
Ryan, requesting that the law firm represent Frazzano in probate litigation.
Frazer Ryan presented a written fee agreement to Frazzano, her
transactional attorney advised her to sign it and she and Frazer Ryan signed
the agreement. As relevant here, the agreement contained a dispute
resolution provision requiring arbitration:
Any dispute regarding the bills must be timely
submitted to binding arbitration in accordance
with the standards of the State Bar of Arizona
Fee Arbitration program. If for any reason that
arbitration program is unable to handle the
dispute, the matter will be privately arbitrated
by any retired Arizona Superior Court or
appellate Court judge of our choosing.
¶3 Frazer Ryan then represented Frazzano in the probate
litigation for nearly two years. Although Frazzano initially paid fees as
invoiced, she later stopped paying and, as a result, Frazer Ryan successfully
withdrew from representing her. When informal attempts to resolve the
payment of fees failed, Frazer Ryan initiated proceedings with the State Bar
1 This court reviews the facts in the light most favorable to affirming the
superior court’s confirmation of the arbitrator’s award. Altreus Cmtys. Grp.
of Ariz. v. Stardust Dev., Inc., 229 Ariz. 503, 506 ¶ 13, 277 P.3d 208, 211 (App.
2012).
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Decision of the Court
of Arizona Fee Arbitration Program. See Lawyers and Legal Fees – Fee
Disputes, http://www.azbar.org/LawyerConcerns/FeeDisputes (last
visited June 3, 2015). When Frazzano did not respond, the State Bar declined
jurisdiction over the dispute. Pursuant to the agreement, Frazer Ryan then
initiated private arbitration by selecting a retired superior court judge as an
arbitrator. Although Frazzano received notice of the private arbitration
proceedings, she did not participate. Based on the evidence provided, the
arbitrator awarded Frazer Ryan $97,419.54 (representing unpaid attorneys’
fees, costs and interest) and imposed on Frazzano $892.50 in arbitrator’s
fees and $116.68 in arbitration costs.
¶4 Frazer Ryan filed an application for confirmation of award of
arbitrator with the superior court, and served Frazzano with process on
November 18, 2013. Frazzano did not respond and Frazer Ryan moved for
an entry of judgment pursuant to Arizona Revised Statutes (A.R.S.) section
12-1511 (2015).2 On December 18, 2013, Frazzano filed an opposition. The
superior court then confirmed the award, finding Frazzano’s opposition
was untimely and rejecting her arguments on the merits. Frazzano
unsuccessfully moved to set aside the confirmation of the award pursuant
to Arizona Rule of Civil Procedure 60(c). This court has jurisdiction over
Frazzano’s timely appeal pursuant to the Arizona Constitution, Article 6,
Section 9, and A.R.S. §§ 12-2101(A)(1) and -120.21(A)(1).
DISCUSSION
I. The Superior Court Properly Found Frazzano’s Opposition Was
Untimely.
¶5 Frazzano claims the superior court erred in finding her
opposition to the application for confirmation of the arbitration award was
untimely. “Upon the expiration of twenty days from service of the
application, which shall be made upon the party against whom the award
has been made, the court shall enter judgment upon the award unless
opposition is made in accordance with § 12-1512.” A.R.S. § 12-1511.
2Absent material revisions after the relevant dates, statutes and rules cited
refer to the current version unless otherwise indicated. Before the superior
court and on appeal, the parties have argued the application of A.R.S. §§
12-1501, et seq., and this court applies that law in resolving this appeal,
noting that there is no indication the result on the merits would be different
under A.R.S. §§ 12-3001, et seq.
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Decision of the Court
Frazzano’s opposition, however, was filed 30 days after Frazer Ryan served
her with its application.3 Accordingly, the superior court did not err in
finding her opposition was untimely, thereby resulting in a waiver. See State
ex rel. Napolitano v. Brown & Williamson Tobacco Corp., 196 Ariz. 382, 386 ¶
15, 998 P.2d 1055, 1059 (2000).
II. The Superior Court Properly Rejected Frazzano’s Opposition On
The Merits.
¶6 The superior court rejected Frazzano’s opposition on the
merits, which she claims was error because (1) the arbitration agreement
was unenforceable; (2) the award exceeded the scope of the arbitration
agreement and (3) Frazer Ryan did not obtain a pre-arbitration order
compelling arbitration.4 None of Frazzano’s arguments show the superior
court erred.
A. Frazzano Has Not Shown The Arbitration Agreement Is
Unenforceable.
¶7 Frazzano claims the arbitration agreement is unenforceable,
meaning “no arbitration agreement existed.” See A.R.S. § 12-1512(A)(5).
Although the arbitration agreement appears facially valid, Frazzano argues
it is unenforceable for three reasons.
¶8 First, Frazzano argues the arbitration agreement violates
public policy governing business transactions between attorneys and
clients under Ethical Rule (ER) 1.8 and is therefore unenforceable. See Ariz.
R. Sup. Ct. 42 ER 1.8. Because she did not make this specific argument to
the superior court, it is waived on appeal. See Cont’l Lighting & Contracting,
3 For the first time in her reply brief on appeal, Frazzano argues
“alternatively” that her opposition was timely because she was not
properly served with the application. Frazzano waived any such argument
by failing to raise it with the superior court or in her opening brief. See Snow
v. Steele, 121 Ariz. 82, 85, 588 P.2d 824, 827 (1978). Moreover, Frazzano has
not factually rebutted the process server’s affidavit showing personal
service. See Hilgeman v. Am. Mortg. Sec., Inc., 196 Ariz. 215, 219–20 ¶ 14, 994
P.2d 1030, 1034–35 (App. 2000).
4Frazzano’s arguments made before the superior court but not made on
appeal are deemed waived. See Schabel v. Deer Valley Unified Sch. Dist. No.
97, 186 Ariz. 161, 167, 920 P.2d 41, 47 (App. 1996).
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Decision of the Court
Inc. v. Premier Grading & Utils., LLC, 227 Ariz. 382, 386 ¶ 12, 258 P.3d 200,
204 (App. 2011). Moreover, on the merits, Frazzano has not shown that ER
1.8 was violated here. Furthermore, Frazzano has not shown that, under
Arizona law, a violation of ER 1.8 would make an otherwise-enforceable
contract unenforceable. See Ariz. R. Sup. Ct. 42 ER Preamble [20] (“Violation
of [an ER] . . . should not itself give rise to a cause of action against a lawyer
nor should it create any presumption in such a case that a legal duty has
been breached.”). Accordingly, Frazzano has not shown that any purported
violation of ER 1.8 makes the arbitration agreement unenforceable.5
¶9 Second, Frazzano argues the arbitration agreement is
procedurally and substantively unconscionable. See Nickerson v. Green
Valley Recreation, Inc., 228 Ariz. 309, 319 ¶¶ 21–23, 265 P.3d 1108, 1118 (App.
2011) (noting procedural unconscionability focuses on “the parties’
bargaining posture or process” whereas substantive unconscionability
focuses on whether “’contract terms [are] so one-sided as to oppress or
unfairly surprise an innocent party’”). Frazzano, however, had
independent counsel who advised her to sign the agreement, and has not
shown how the bargaining process leading up to her doing so was
procedurally unconscionable. See id. Frazzano argues the arbitration
agreement is substantively unconscionable because it “creates an
arbitration process with no standards or procedures.” However, it was
Frazzano’s failure to respond to Frazer Ryan’s efforts to invoke the State
Bar Fee Arbitration Program (which has detailed procedures Frazzano has
not challenged) that created any such lack of guidance. Similarly, although
Frazzano challenges as substantively unconscionable the arbitration
agreement’s terms allowing Frazer Ryan to select a retired judge, she made
no objection to Frazer Ryan’s selection and that selection was necessitated
by Frazzano’s decision not to participate in the State Bar Fee Arbitration
Program. Accordingly, Frazzano has failed to show the agreement’s terms
5 To the extent Frazzano argues in her reply brief that public policy
independent from an ER 1.8 violation renders the agreement unenforceable,
this argument is waived. Hunnicutt Constr., Inc. v. Stewart Title & Trust of
Tucson No. 3496, 187 Ariz. 301, 307, 928 P.2d 725, 731 (App. 1996). Moreover,
Frazzano has not shown that enforcement of the agreement would be
contrary to public policy. See 1800 Ocotillo, LLC v. WLB Grp., Inc., 219 Ariz.
200, 202 ¶ 8, 196 P.3d 222, 224 (2008) (“[C]ourts should rely on public policy
to displace the private ordering of relationships only when the term is
contrary to an otherwise identifiable public policy that clearly outweighs
any interests in the term’s enforcement.”).
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Decision of the Court
were “‘so one-sided as to oppress or unfairly surprise an innocent party.’”
Id. at 319 ¶ 23, 265 P.3d at 1118 (citation omitted).6
¶10 Third, Frazzano claims the arbitration agreement is
unenforceable based on her lack of capacity. Although Frazzano has the
burden to show such a claim “by clear and convincing evidence,” she has
offered no evidence showing that her “mental abilities [were] so affected as
to render [her] incapable of understanding the nature and consequences of
[her] acts” when she signed the agreement. Hendricks v. Simper, 24 Ariz.
App. 415, 418, 539 P.2d 529, 532 (1975) (citation omitted).7
B. Frazzano Has Not Shown That The Award Exceeded The
Scope Of The Arbitration Agreement.
¶11 Frazzano argues the award exceeded the scope of the
arbitration agreement because the arbitrator divided arbitration fees and
costs, which were not expressly provided for in the arbitration agreement.
By statute, “[u]nless otherwise provided in the agreement to arbitrate, the
arbitrators’ expenses and fees, together with other expenses, not including
counsel fees, incurred in the conduct of the arbitration, shall be paid as
provided in the award.” A.R.S. § 12-1510 (emphasis added). Frazzano cites to
no provision in the arbitration agreement precluding such an allocation of
arbitration fees and costs, and the court has found none.
¶12 Frazzano also argues the arbitration agreement required
private arbitration to conform to the State Bar Fee Arbitration Program
procedures. Because Frazzano did not make this specific argument to the
superior court, it is waived. See Premier Grading & Utils., 227 Ariz. at 386 ¶
12, 258 P.3d at 204. Even absent waiver, Frazzano has not shown that the
6Similarly, Frazzano has not shown that the arbitration agreement “lacks
mutual consent because of ambiguity” about procedures to be used for
private arbitration using a retired judge.
7 In her reply on appeal, Frazzano asks this court to review her motion to
set aside the award and related documents as support for her argument that
she lacked capacity. Because she did not raise this issue in her opening brief,
it is waived. See Schabel, 186 Ariz. at 167, 920 P.2d at 47. Even absent waiver,
Frazzano’s motion and related documents reveal no evidence that she
lacked capacity when she signed the agreement. Consequently, this court
denies her alternative request for additional briefing on this issue.
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Decision of the Court
agreement required private arbitration to use the procedures prescribed by
the State Bar Fee Arbitration Program.
C. Frazer Ryan Was Not Required To Obtain An Order
Compelling Arbitration.
¶13 Frazzano argues the award was void because Frazer Ryan did
not obtain a pre-arbitration order compelling arbitration. Frazzano
contends the “implicit requirement” of A.R.S. § 12-1502(A) is that the party
seeking arbitration must seek an order to compel arbitration whenever an
opposing party refuses to arbitrate so the court can make a pre-arbitration
decision about the validity of the arbitration agreement. Brake Masters Sys.,
Inc. v. Gabbay rejected such an argument, stating that “[a]lthough [A.R.S.] §
12-1502(A) allows a party attempting to arbitrate to seek a court order
determining arbitrability and compelling the other party to arbitrate, this
section does not require the party attempting to arbitrate to do so.” 206 Ariz.
360, 363 ¶ 6, 78 P.3d 1081, 1084 (App. 2003). Nor has Frazzano supported
her argument that Brake Masters’ interpretation of A.R.S. § 12-1502(A)
renders that provision superfluous. Indeed, as Brake Masters recognized,
requiring the party seeking arbitration to obtain “a pre-arbitration judicial
determination of arbitrability” would render superfluous two of the
grounds for opposing confirmation of the award after issuance. 206 Ariz. at
363 ¶ 6, 78 P.3d at 1084 (citing A.R.S. § 12-1512(A)(3), (5)). Moreover,
Frazzano had a pre-arbitration opportunity to challenge the validity of the
arbitration agreement by seeking a stay in superior court, see A.R.S. § 12-
1502(B), but failed to do so.
CONCLUSION
¶14 The superior court’s judgment confirming the arbitration
award is affirmed. Because Frazzano is not the prevailing party on appeal,
her request for attorneys’ fees and costs on appeal is denied. Frazer Ryan is
awarded its costs on appeal contingent upon compliance with Arizona Rule
of Appellate Procedure 21.
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